Hot Jupiter atmospheres exhibit fast, weakly-ionized winds. The interaction of these winds with the planetary magnetic field generates drag on the winds and leads to ohmic dissipation of the induced electric currents. We study the magnitude of ohmic dissipation in representative, three-dimensional atmospheric circulation models of the hot Jupiter HD 209458b. We find that ohmic dissipation can reach or exceed 1% of the stellar insolation power in the deepest atmospheric layers, in models with and without dragged winds. Such power, dissipated in the deep atmosphere, appears sufficient to slow down planetary contraction and explain the typically inflated radii of hot Jupiters. This atmospheric scenario does not require a top insulating layer or radial currents that penetrate deep in the planetary interior. Circulation in the deepest atmospheric layers may actually be driven by spatially non-uniform ohmic dissipation. A consistent treatment of magnetic drag and ohmic dissipation is required to further elucidate the consequences of magnetic effects for the atmospheres and the contracting interiors of hot Jupiters.